Former nightclub owner sentenced to prison and fined in mortgage-fraud scheme

Thursday

Jan 31, 2013 at 12:01 AMJan 31, 2013 at 3:39 PM

The former owner of a popular Downtown nightclub was sentenced this morning to 2 1/2 years in prison and ordered to pay $1.9 million in restitution for his involvement in a $3.6 million mortgage-fraud case. Kevin D. Hightower, 44, of Reynoldsburg pleaded guilty in October to money laundering, conspiracy and lying to lenders. Other charges were dropped.

Kathy Lynn Gray, The Columbus Dispatch

The former owner of a popular Downtown nightclub was sentenced this morning to 2 1/2 years in prison and ordered to pay $1.9 million in restitution for his involvement in a $3.6 million mortgage-fraud case.

Kevin D. Hightower, 44, of Reynoldsburg pleaded guilty in October to money laundering, conspiracy and lying to lenders. Other charges were dropped.

“It’s going to be a long journey making amends to the people I hurt,” Hightower said in court.

An Internal Revenue Service investigation found that Hightower and others bought 38 Columbus properties in 2006 and 2007 by lying on federal documents, illegally providing down payments and cash incentives to buyers, and taking kickbacks.

Hightower operated the conspiracy through his real-estate investment company, Suite 500 LLC, and a branch of Premier Mortgage Funding of Ohio, a mortgage brokerage.

Like many mortgage-fraud schemes, this one was based on getting hugely inflated appraisals for properties, obtaining loans for the appraised amounts, and then allowing the homes to go into foreclosure after participants took their cuts. Most of the homes were on the Near East Side.

Hightower was indicted in May on charges of bank and wire fraud, conspiracy to commit bank fraud, lying to a lender, money laundering and conspiracy to commit money laundering.

He is the former owner of Club Ice, a hip-hop club at 40 E. Long St. until January 2010.

He could have been sentenced to 10 years in prison and fined $250,000 on each of the conspiracy and money-laundering counts. The conviction involving false statements to lenders could have resulted in a sentence of 30 years in prison and a $1 million fine.